Sunnyvale (CA) – AMD announced its “intention” to offer $1.5 billion worth of convertible senior notes, with the option of $225 million in additional notes to cover over allotments.
According to a press release distributed late Wednesday, the company expects to use the proceeds of the offering as well as some of its cash to repay the outstanding balance in a loan agreement with Morgan Stanley Senior Funding. AMD took out this loan in the amount of $2.5 billion on October 24 of last year in order to cover a substantial portion of the acquisition of ATI.
The purchase price of the former graphics chip maker was paid with $1.8 billion cash AMD had available, $2.5 billion in cash through the Morgan Stanley loan as well as more than 57 million AMD shares. The total purchase price was $5.4 billion.
This new convertible senior notes offering follows close on the heels of an earlier offering AMD announced in April of this year. Back then, the company issued an offering that included an aggregate amount of $2 billion of convertible senior notes, plus an additional $200 million in notes to cover over allotments.